Cirrus Logic Inc (CRUS)

Cash conversion cycle

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Days of inventory on hand (DOH)	days	79.18	69.68	48.89	77.67	66.79
Days of sales outstanding (DSO)	days	33.17	28.96	49.23	28.98	43.88
Number of days of payables	days	19.35	24.32	40.76	46.06	35.69
Cash conversion cycle	days	92.99	74.33	57.36	60.59	74.98

March 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 79.18 + 33.17 – 19.35
= 92.99

The cash conversion cycle of Cirrus Logic Inc has exhibited fluctuations over the past five years. In the most recent fiscal year ending on March 31, 2024, the cash conversion cycle increased to 92.99 days, representing a significant extension compared to the prior year's 74.33 days. This indicates a possible delay in converting resources into cash flows.

Looking further back, the trend shows variability in the cash conversion cycle. There was a notable decrease in the cycle from 2020 to 2021, which improved the efficiency of the company's working capital management. However, the cycle lengthened again in the subsequent fiscal year, reaching 60.59 days in 2021.

The cash conversion cycle hit its lowest point in the past five years in 2022 at 57.36 days, reflecting a faster conversion of inventory and receivables into cash. This efficiency was reversed in the following year, as the cycle extended to 92.99 days in 2024.

It is important for Cirrus Logic Inc to closely monitor and manage its cash conversion cycle to optimize its working capital and operational efficiency. A longer cycle can tie up resources and hinder liquidity, while a shorter cycle can improve cash flows and overall financial performance.